The November 2025 updates to the Canada Pension Plan (CPP) and Old Age Security (OAS) bring important adjustments to retirement benefits.
These changes include higher payouts, updated contribution rates, and key tax considerations, designed to help Canadians maintain stable income during retirement while addressing inflation and enhancing the overall pension system.
Let’s dive into the new benefit levels, contribution rates, and payment schedules.
Canada Pension Plan (CPP) Updates For 2025
1. Increased Monthly Benefits
The maximum monthly benefit for new CPP retirees at age 65 has risen to $1,433 in 2025. However, most individuals will receive less, depending on their lifetime contributions and the age they start claiming benefits.
It’s important to note that delaying CPP beyond 65 can increase monthly payments by up to 42 percent, while starting earlier could reduce benefits by as much as 36 percent.
2. Contribution Rates And Limits
The contribution rate for both employees and employers remains at 5.95 percent for 2025, while self-employed individuals contribute at 11.90 percent.
The Year Maximum Pensionable Earnings (YMPE) has been set at $71,300, with a basic exemption of $3,500.
Employees will stop contributing once their earnings hit the YMPE, while self-employed individuals contribute both portions (employee and employer).
3. CPP Payment Schedule
For those receiving CPP benefits, the next payment date is November 26, 2025. Payments are typically issued on the third-to-last business day of each month.
Seniors are encouraged to confirm their payment details through the My Service Canada Account to ensure timely deposits.
Old Age Security (OAS) Updates
1. Indexed Increases For The October-December 2025 Quarter
OAS payments are reviewed quarterly to match inflation. For the October to December 2025 period, OAS will increase by 0.7 percent.
For seniors between 65 and 74 years old, the OAS benefit will be $740.09 per month, while those aged 75 and older will receive $814.10.
2. OAS Payment Schedule
Like CPP, OAS payments follow the same schedule, with the next deposit set for November 26, 2025. Payments for both benefits are made simultaneously for convenience.
3. OAS Recovery Tax (Clawback)
High-income seniors should be mindful of the OAS clawback (recovery tax). If a senior’s net world income exceeds a specified threshold, part or all of their OAS payments may be reduced.
Seniors should review their income sources and adjust withdrawals from RRSPs or RRIFs to avoid unexpected clawback amounts.
Tax and Contribution Alerts For Seniors
- CPP Contribution Ceiling: Employees contribute until their annual income reaches $71,300, after which no further deductions occur.
- Self-Employed Individuals: These individuals must contribute the full 11.90 percent, covering both the employer and employee shares.
- Taxable Nature of Benefits: Both CPP and OAS are taxable. Seniors should consider voluntary tax withholdings to avoid large year-end tax liabilities.
- Avoiding OAS Clawback: Those nearing the OAS income threshold should think about splitting pension income with a spouse or delaying withdrawals to reduce taxable income.
Inflation And Indexation Policies
- CPP Indexation: Adjustments are made annually based on the Consumer Price Index (CPI), which ensures the benefit keeps pace with inflation.
- OAS Indexation: OAS benefits are updated quarterly to reflect short-term inflation changes, ensuring they retain purchasing power.
Maximizing Retirement Income
- Delay Benefits for Higher Payouts: Delaying CPP or OAS benefits up to age 70 can significantly increase your total lifetime payouts.
- Use the My Service Canada Account: This tool allows users to easily track their contribution records, benefit estimates, and payment history online.
- Consider Voluntary Tax Withholding: This strategy helps prevent large tax bills by setting up voluntary withholdings on CPP and OAS benefits.
- Review RRSP and RRIF Withdrawals: Seniors should manage their withdrawals to avoid exceeding income limits that could trigger higher taxes or OAS clawback.
- Coordinate Benefits and Personal Savings: Combining CPP, OAS, and personal savings can help retirees maintain a steady income stream while minimizing taxes.
Impact On Canadians
These November 2025 updates are part of a long-term strategy to strengthen Canada’s pension system.
The higher CPP limits enable workers to save more for retirement, while the OAS adjustments provide ongoing support to seniors coping with inflation.
Together, these measures ensure that retirees can maintain their standard of living despite changing economic conditions.
The November 2025 CPP and OAS updates reflect the government’s commitment to improving the retirement experience for Canadian seniors.
With higher benefits, updated contribution rates, and inflation adjustments, retirees will find greater financial stability.
Understanding these changes is crucial for ensuring that pension income remains adequate in the face of rising living costs.
FAQs
1. When will the next CPP and OAS payments be issued?
The next CPP and OAS payments will be issued on November 26, 2025.
2. How much can I expect from CPP at age 65?
The maximum CPP benefit at age 65 is $1,433 per month in 2025, but this amount may vary based on individual contributions.
3. How does the OAS clawback work?
The OAS clawback reduces your OAS payments if your net world income exceeds a certain threshold. Review your income to manage this effectively.